Tuesday, October 12, 2010

Dollar is Finding a Bottom

In the last two days the Dollar appears to be forming a bottom. You can see in the attached chart how its rapid decline has paused, and it even spiked above the upper trendline of its descent. Overnight it has fallen back inside, and it still may get to DX76 before bouncing. Currently it is right above DX77.

EWTrends adds to this a discussion of the circled technical indicators, which appear to have reversed.

My guess is that DJR surpasses the april high and stay there for a few day's and SPX will run in to resistance of the april top and does not surpass. Expect then consolidation or a light correction and a final break of the april top.

on DJR, those 3 lows from early 2008 are real resistance. get through those lows, and, through Maxine Waters' new scam for a pause in foreclosures (she's so damn desperate to save her hide), then maybe reit's might be a good sign for comm. and residential RE in the US.

somebody is ringing the spx 1180 bell.

wave rust

the advantage of years spent watching and trading the markets is wasted, if you die soon after figuring out how damned simple the markets really are.

in a bullish move (like since Mar'09), imho, it's the momentum divergences that kill traders because they are looking at the wrong ones.

usually thay are focused on divergences at highs, but it's really the corrections and their divergences that tell you how bullish it is, or is not.

for example, look at a weekly chart of 5 or 6 indices. put as much data on the screen that you can. look at those extreme lows in any momo indicator. thats where you see index price lows at higher levels while the momo's spike back to the previous momo lows. thats a buy, that keeps on giving.

look at those small pullbacks from the March '09 low and their momo's. just a thing of beauty, imo.

very simple. very elegant. and, by golly, you can see why i said "let's just call the August 2010 low a 2 wave, and move on." :)

Well right on schedule as the Fed minutes yesterday set the stage for the final 5 wave thrust up. The bulls will be giddy with hyperinflation leading the way. The bears in total capitulation mode. A perfect ending for P2. What will cause it who knows, Foreclosuregate,Germany's high court Euro ruling,China finally saying screw you UST,all or none of the above. Wherever and whenever this thrust ends look for a big reversal.

the usd is frustrating to analyze. it's useful and i watch it daily. but since yen is the heaviest weight, i watch that too. imo, it goes lower and $/gold goes higher, until they don't.

what surprises me is that i havent seen the favorite "tool" of some trader/bloggers, etc. used on the usd.

i don't think its much more than a continuation formation, but a head and shoulders with armpits at 79 or 80, puts usd index at 70ish.

do you think thats too "scary" to call for new lows on the USD at 70 in the near future?

the euro isnt far from 75% retrace at 1.4200, and thats just an afternoon spike away.

With the 2nd round of QE II being launched soon, fully booked berths ,,,, it's an SRO launch (remember the crowded decks of the Titanic when it sailed?) ,,,, getting to the lows, or a low sometime this year is not going to surprise me, but it may surprise the Swiss.

Imagine all of Europe, most of Asia calling the U.S. protectionist 'by fiat currency manipulation' by Christmas. :)

I don't understand how people make this so difficult in here.... The Fed is practically screaming at you that they are putting a floor under stocks, and either this economy is improving or they'll keep raising the floor. That is a scientific fact, my opinion is that they also think this is a confidence issue and nothing breeds more confidence than a rising stock market. The ONLY guesswork is when to take profits in 2011.....

you just wait until next week too, cuz thats when I'm going to tell my mom that you called me an ankle biter.

you just wait.

if you thought I was putting you down about spiral dates, etc. then you're wrong.

if i wanted to put you down, i would have difficulty choosing from so many choices that you have shown in your prior posts.

imo, if you make a call that's wrong, then join the club. thats a part of trading. when wrong, change your call/trade whatever.

heck, don't get mad about somebody mentioning what you said. emotions are suicidal in trading.

heck, i'm wrong quite often. doesn't bother me. calling me names doesn't bother me either. i have been pissed at myself (years ago) and reacted less than politely to those who offered a counter argument to my call.

Eventually, I got over myself and began to listen to others ways, techniques and views. I learned something, then asked questions, and learned more. Then I asked more questions ,,, and so on.

I still learn things from people, and I have been trading longer than most people who would even give you a second thought. Lots of people helped me and still do. I find being helped by others, and helping others, is a great secret of living a great life.

Roger you have no credibility. But nobody else here does, either. Poor predictions. Might as well be randomly generated.

Prechter has excellent predictive value and you can take in decades of data. But it is anti-predictive. My guess is the louder/more publicized his calls the more reliably anti-predictive (NYT article, eg).

Hank seemed to have a better than random positive predictive value but his last call was a real stinker. He seems to have disappeared.

Lots of people here could do a good job writing pages-long essays on why their coin is going to roll heads next time.

wave, the argument for a USD bottom is based on QE being priced in .. if we bust through the 76 level in the DX there is no reasonable level below that to hang a hat on. Game over for the fiat system. It would put the Fed into a real dilemma - the Triffin Paradox - to decide to let the USD free fall vs keep long rates low. I would bet they let the USD fall, leading to a bigger crisis down the road.

Mamma, the EWI counts are pretty well busted. They can cling to 1181 but almost always when a retrace goes above 78% it goes above 100% ie to new highs. Fractal Finance went bullish after the break above 1130 that stayed above, and at a larger time scale the break above 1150 (going back to Jan).

what concerns me is this rally has zero volume. If smart money hedge funds and wall street specialist firms were anticipating higher prices they would be buying heavy longs and building inventory making volume surge

"Roger you have no credibility. But nobody else here does, either. Poor predictions. Might as well be randomly generated.

Prechter has excellent predictive value and you can take in decades of data. But it is anti-predictive. My guess is the louder/more publicized his calls the more reliably anti-predictive (NYT article, eg).

Hank seemed to have a better than random positive predictive value but his last call was a real stinker. He seems to have disappeared.

Lots of people here could do a good job writing pages-long essays on why their coin is going to roll heads next time."

Cory your exactly right,but my total view is that we are near the end of a grand supercycle bull market. I will be right and this stock market will not see these levels again in most of our lifetimes again. Japan has been in a bear market for 20 years and will probably continue to be in one for another 20.

Since the 660 bottom most market leaders have been in the blowoff supercycle 5th waves and some are making huge double tops here. This market is so close to topping now and when it does it will fall for months.

Yelnick..... what new bearish count is EWI going to come up with now? After watching many Ewavers and their forecasts over the years, it's hard for me to believe it's still around! If nothing else it's good for a good laugh when they turn out to be wrong. Looks like Tony C. is the winner this time, but I'm sure his forecasts in the future will at some point be as bad as Bob P. Before the top of the credit bubble pop Tony C. was sure we were headed to 36,000 and in the early stages of a bull market. NOT! What would be really scary is if all Ewavers had bullish counts. Look out below!!

You know, I try not to put much weight in counts, in this environment. They're just one more tool. Like the one that reached out of my screen yesterday morning, punched me in the eye, and told me I was probably wrong on the very short term.